Try to re-calibrate the screen. Access this with just the keyboard, and when you finally get to the calibration part, use the stylus.
Menu --> System Tools --> Input Setup
It takes awhile to open. Once opened, navigate with just the [TAB key] to the last entry:
"Recalibrate stylus on next start of window manager" Use the spacebar to place a tick in the selection.
Now, [TAB] over to the [OK] button and hit enter.
It should close and a dialog should pop up, saying "restart?" [Yes] [No]. Tab to [Yes], hit enter, and the desktop should shut down and exit.
Next, the recalibration screen should come up, and you can try to recalibrate your screen with the stylus.
If the restart dialog doesn't come up, just hit ctrl-alt-esc to exit. Then type startx to restart. The recalibration screen should come up.
I really don't know what the problem could be, but if the above doesn't work, and no one else jumps in with a solution, I would just break down and start over with a fresh re-flash.